Cash Flows from Operating ActivitiesIndirect Method

The net income reported on the income statement for the current year was $240,000. Depreciation recorded on equipment and a building amounted to $72,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year

Cash $67,200 $72,000

Accounts receivable (net) 84,000 88,800

Inventories 168,000 150,000

Prepaid expenses 9,600 10,800

Accounts Payable(merchandise creditors) 72,000 78,000

Salaries Payable 12,000 10,200

a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required.

Statement of Cash Flows (partial) ?

Cash flows from operating activities:

_______________________________ $______________

Adjustments to reconcile net income to net cash flow from operating activities:

_______________________________ $______________

Changes in current operating assets and liabilities:

_______________________________ $______________

_______________________________ $______________

_______________________________ $______________

_______________________________ $______________

_______________________________ $______________

Net cash flow from operating activities: $_______________